Monday, 29 November 2010

Dr Frisby's Current Legal Problems (CLP) lecture - this Thursday

Dr Sandra Frisby's CLP lecture is due to take place this Thursday at UCL. Book now to avoid disappointment.

Friday, 26 November 2010

McGuinness v Norwich and Peterborough Building Society [2010] EWHC 2989 (Ch) (23 November 2010) - the nature of a guarantor's liability to the creditor, and the consequences in terms of the creditor's ability to present a bankruptcy petition

Mr Justice Briggs (pictured) has handed down his judgment in McGuinness v Norwich and Peterborough Building Society [2010] EWHC 2989 (Ch) (23 November 2010). The case makes very interesting reading. The case concerns a bankruptcy order made against Mr Spencer Robert McGuinness. The sum Mr McGuinness owed amounted to £1,223,883.26. This liability arose due to an alleged guarantee and indemnity given by him in relation to his brother's borrowing liabilities. In terms of technical legal points the learned judge summaries the issues as follows: "This appeal...raises two interesting points about the nature of a guarantor's liability to the creditor, and the consequences in terms of the creditor's ability to present a bankruptcy petition. In short, is it a liability "for a liquidated sum" within the meaning of section 267(2)(b) of the Insolvency Act 1986 or only a liability to pay unliquidated damages? If the latter, is the creditor disabled from presenting a bankruptcy petition without first obtaining judgment for a specific sum, even in a case where the liability is admitted, and the amount of the damages can be identified with mathematical precision?"

Following a thorough examination of the pertinent case law the learned judge holds that: "For my part, I doubt whether the issue is necessarily an either/or question as between debt and damages. Some guarantees, and in particular that which was the subject of the TS&S Global case, may create both. For present purposes, the critical question is whether the Guarantee includes, rather than necessarily consists of, a debt obligation. In my judgment the Guarantee does include a debt obligation. My main reason for that conclusion is that, by the principal debtor provision in the first sentence of clause 4.2 of the Guarantee, the Appellant thereby made his brother's debts his own, as occurred in MS Fashions v. BCCI. Mr Arden sought to persuade me to attribute a different meaning to that provision, by reading the whole of clause 4.2 of the Guarantee together, so that the principal debtor provision was designed (he said) to do no more than to enable the creditor to enforce the Guarantee without prior demand against the principal debtor. I disagree. It is evident from Moschi v. Lep Air that, where a guarantee sounds in damages rather than debt, the creditor may enforce against a mere surety without prior demand on the debtor, precisely because the debtor's default gives rise to a simultaneous breach of the surety's obligations. The effect of a principal debtor provision is not therefore to enable the creditor to proceed without first claiming against the principal debtor, but (among other things) that any debt due is immediately payable by the guarantor without prior demand upon him: see MS Fashions v. BCCI..."

Mr Justice Briggs obiter comments on the policy and nature of guarantees is also very interesting. Concluding his judgment Briggs, J observes; 

"Nonetheless, and in case the issue should arise again, I will make the following observations about it. The first is that it does seem remarkable that a person from whom £1,000 has simply been stolen should be unable to present a bankruptcy petition (following a statutory demand), whereas a person with a £1,000 contract debt may do so, always assuming that there is not a bona fide defence to either claim on reasonable grounds. As Proudman J said in Truex v. Toll [2009] 1 WLR 2121, at 2129, the question whether a sum is liquidated and whether there is a defence of the claim are entirely separate issues.
Secondly, I have real doubt whether distinctions based on different causes of action (i.e. debt, account and payment, damages) satisfactorily address the purpose behind section 267(2)(b) of the Act, which seems to me to distinguish between cases where there is no issue as to the amount of a liability, and cases where some process of assessment by the court is necessary, before the amount can be identified. I can well understand that a claim for an account which depends upon the defendant providing disclosure as to the amount of an alleged secret profit cannot possibly be a claim for a liquidated sum. By contrast, a claim to recover stolen money, where the precise amount stolen is known by the claimant, seems to me in principle to be a claim for a liquidated sum, even though the form of action is one for account and payment.
Finally, even in cases involving guarantees of the "see to it" type, it is frequently the case that, although the form of action may be a claim for damages against the guarantor, the quantum of the claim may involve no uncertainty or need for the application of the court's opinion. Moschi v. Lep Air was genuinely a case where (subject to the guarantee limit of £40,000) damages were at least in theory at large, because of the accepted repudiation of the contract between the creditor and the principal debtor. But a case like the present, where there is a debt rather than damages owed by the principal debtor, and where, on any view, the guarantor's obligation is to pay a sum identical to that debt, it seems to me to risk an absurd waste of costs and delay to require the creditor first to issue a claim and obtain an inevitable summary judgment upon it, before beginning bankruptcy proceedings. I suspect that there have since Moschi v Lep Air been many unreported cases where a creditor under a "see to it" guarantee has succeeded in bankruptcy proceedings without obtaining a prior judgment. Nonetheless it is because the Guarantee included a liability in debt that this appeal must be dismissed."

Picture Credit: http://i.dailymail.co.uk/i/pix/2010/03/17/article-1258581-08C19B25000005DC-40_233x382.jpg and UPPA.

Thursday, 25 November 2010

Business Confidence in Bank Lending: R3's perspective

R3 have published an interesting new press release on business confidence in bank lending. The release notes: 

"A survey of business owners reveals that over forty percent (44%) of them believe that the banks have been broadly supportive over the last three months to September; while less than a quarter (22%) disagree with this sentiment. Out of that group, just 17% of business owners disagree ‘strongly’ that banks have been supportive.

R3 President, Steven Law commented:
"It is interesting that, despite the negative tone of much of the public debate around bank behaviour, just one in six businesses actually agree with this stance. This may suggest the presence of a vocal minority within the business community. I have seen a significant difference in the approach of the banks compared to their behaviour during the 1990s. In the last downturn, banks swiftly removed facilities; this time around they are working with businesses - granting holidays on loan payments and extending loan periods."

In terms of creditor support, over a third (34%) of business owners believe that HMRC has been broadly supportive over the last three months; and thirty percent of businesses believe that trade creditors have been broadly supportive.

Steven Law continued:
"Creditor behaviour has a significant impact on business survival and insolvency trends and this has certainly played a key role in stemming the tide of insolvencies. We've seen historically low interest rates keeping the cost of servicing debts relatively low; and HMRC's tax-deferral schemes allowing businesses breathing space to pay their taxes.

"Businesses have generally benefitted from supportive creditors so far, but this approach may not continue. As conditions change, so may the approach of major creditors, so it is vital that financially vulnerable businesses seek financial advice sooner rather than later."

Picture Credit: http://www.ewr.co.uk/wp-content/uploads/2009/09/R3%20logo.jpg

Wednesday, 24 November 2010

Pearson & Ors (The Joint Administrators of Lean Brothers International (Europe)) v Lehman Brothers Finance SA & Ors [2010] EWHC 3044 (Ch) (23 November 2010)

Mr Justice Briggs has handed down his judgment in Pearson & Ors (The Joint Administrators of Lean Brothers International (Europe)) v Lehman Brothers Finance SA & Ors [2010] EWHC 3044 (Ch) (23 November 2010). The case concerns costs for an administrators application. As the learned judge notes, "There is a sharp divergence between counsel as to how these proceedings should be categorised for the purpose of the exercise of the court's jurisdiction as to costs. For the Administrators, Mr Milligan QC described it as, in substance, commercial litigation between rival claimants to beneficial ownership of specific property (i.e. the Rascalled securities), in relation to which costs should follow the event, as in any other commercial litigation. Counsel for the affiliates all described it as being, in substance, a joint application by the various office-holders of insolvent companies within a common group to the appropriate forum for the resolution of difficult issues affecting them all, and standing in the way of the realisation and disposal of assets to creditors, or to other persons entitled to them." After an exhaustive exposition of the salient law and facts of the case Briggs, J observes, "...I propose to direct that these respondents bear 50% rather than the 75% of LBIE's costs...I consider that LBI ought to pay all that 25% of LBIE's total costs attributable to the issues between these two parties..."

Tuesday, 23 November 2010

Winding up and solicitors fees: Falmouth House Freehold Company Ltd & Anor v Morgan Walker LLP [2010] EWHC B26 (Ch) (23 November 2010)

The Honourable Mr Justice Lewison, sitting with Master Campbell and Mr Peter Todd as Assessors, has handed down his judgment in Falmouth House Freehold Company Ltd & Anor v Morgan Walker LLP [2010] EWHC B26 (Ch) (23 November 2010) . The case does not concern a specific insolvency point, but a dispute over solicitors' fees arising from a winding up petition. For example, "The evidence in support of the petitions had been preceded by a statutory demand served by Morgan Walker on House. The particulars of the debt stated that the debt was incurred on 20 November 2008 and payable on 21 December 2008; and that it arose pursuant to an invoice dated 20 November 2008. The amount of the debt was said to be "at least" £31,417.07. That was because Morgan Walker were holding £170,000 which, together with the amount specified in the statutory demand, made up the total of £201,417.07 claimed in the invoice... It could not be argued that that bill had been paid, since the non-payment of that bill was the foundation of the statutory demand; and of Morgan Walker's support of the winding up petition. It had, at best, been partly paid"

Picture Credit: http://www.planetware.com/i/photo/royal-courts-of-justice-london-lncrtjs3.jpg

Monday, 22 November 2010

Insolvency Service Statistics - what do users require from the statistics?

The Insolvency Service (IS) are to host a stakeholder meeting, to provide users of insolvency statistics with the opportunity to let them know how they (the users) use the official statistics the IS currently publish, what users would like to see more of, and what they could do without. This will help ensure end users’ views inform priorities for statistical work going forward, in the light of inevitable pressures on available resource. The IS are hoping to attract representatives from a range of different organisations and interests, including those from the insolvency profession; the debt advice industry; academia; the Bank of England; other government departments; and colleagues internal to the IS or the Department for Business, Innovation and Skills.

The IS recently ran a user engagement consultation on these statistics; the Government Response to this is due to be published by the end of the year. There has already been some public feedback from academia on the statistics. In an open letter Professor Sir Roy Goode QC has recently observed that there should be more detail in the published statistics. In particular he opined that we should have more:

"1.    Details of the number of cases in which a company moves from one insolvency regime to another (it is difficult to extract this information from the published stats).
2.    Details of the time taken from the start of an insolvency process to its conclusion.
3.   Particulars of:

     (1)   the amount paid for the expense of the liquidation or other insolvency process broken down into main    
            heads;
     (2)   the percentage of claim recovered from their security by:
            (a)   the holders of fixed charges;
            (b)   the holders of floating charges; 
     (3)   the percentage of claim distributed as dividend to:
            (a)   preferential creditors;
            (b)   ordinary unsecured creditors;
            (c)   deferred creditors.
    (4)   the percentage left for shareholders."

The statistics meeting will be held in the Insolvency Service’s London Offices at 21 Bloomsbury Street in January 2011.

Wednesday, 17 November 2010

Prisoners and Debt: Some New Research from Prison Reform Trust and UNLOCK, the National Association of Reformed Offenders

We have discussed prisoners and debt on the blog before, but purely in an historical context. Some new research has been published that discusses the subject in a modern perspective. Time is Money: financial responsibility after prison, published by the Prison Reform Trust and UNLOCK, the National Association of Reformed Offenders, with the support of the Friends Provident Foundation, argues that exclusion from bank accounts, insurance and affordable credit is preventing former offenders from getting into work and securing a home and forcing their families into debt. As the report's authors note: "The Ministry of Justice highlight stable employment and housing as the most important factors in reducing the risk of reoffending but achieving either is difficult without access to basic financial services."

The authors Chris Bath, Director of Projects at UNLOCK, and Dr Kimmett Edgar, Head of Research at the Prison Reform Trust, explore the impact of the criminal justice system on banking, credit, debt, savings, financial capability, benefits, and insurance. The role of advice and the practical implications of the Rehabilitation of Offenders Act are also considered. The key findings inform practical, cost effective recommendations to achieve financial inclusion for people in prison, former offenders and their families, improve resettlement and reduce reoffending.

Monday, 15 November 2010

The Rt. Hon. the Lord Denning of Whitchurch O.M. on Bankruptcy and Insolvency

We have recently discussed the contribution of FE Smith to the bankruptcy jurisdiction. We can now focus on another giant of the bench,"the best-known and best loved judge in our history" (per Lord Bingham), namely, the Right Honourable the Lord Denning of Whitchurch OM, PC, DL, DCL, LLD (23 January 1899 – 5 March 1999 - pictured). A graduate of Magdalen College, Oxford, Denning was called to the bar by Lincoln's Inn on 4 November 1921. He was made a King's Counsel in 1938. He became a Family Division judge in 1944, "then the youngest judge on the High Court bench" (per Lord Goff) and a Lord Justice of Appeal in 1948. He went up to the judicial House of Lords as a Lord of Appeal in Ordinary in 1957. He went back to the Court of Appeal in 1962 as Master of the Rolls. The Lord Neuberger has recently undertaken a similar route to the Lord Denning. Denning retired in 1982 following a twenty year stint as Master of the Rolls. 

So what of the Lord Denning's contribution to the bankruptcy jurisdiction? As a Lord of Appeal in Ordinary, Master of the Rolls, Lord Justice of Appeal (but not as a pusine judge - in each case he will be referred to by the title he held at the time, not his final title), Denning sat on a number of important and interesting insolvency related cases. We will examine a number of them here. The first case of note, and perhaps his most important contribution, is Bendall v McWhirter [1952] 2 Q.B. 466. The case concerned the vexed question of the deserted wife's equity. The husband had been adjudicated bankrupt. There was a claim to possession of the matrimonial home by trustee in bankruptcy in whom the freehold of the house vested. The trustee brought an action to recover possession and mesne profits against the wife as a trespasser from the date of the adjudication in bankruptcy. The question before the court was whether the trustee takes the property subject to wife's right. The court had to consider the effects of the Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), ss. 18 (1), 22 (4), 38 (b), 105 (1). 


At first instance the county court judge held that as the wife was a licensee whose licence was determined when the property vested in the trustee, he took it unfettered by matrimonial obligations. The County Court judge then made an order for possession with mesne profits in favour of the trustee. This decision was appealed by the wife up to Denning and his brother Court of Appeal judges. It was held by that court that  a deserted wife in occupation of the matrimonial home has a personal licence, revocable by her husband only by obtaining an order of the court under section 17 of the Married Women's Property Act, 1882. Furthermore it was stated that where the matrimonial home is a freehold house which vests in the husband's trustee in bankruptcy under the provisions of the Bankruptcy Act, 1914, the trustee takes the house subject to the wife's licence, and cannot obtain possession of it without an order of the court which could be made on an application for possession under section 105 (1) of the Bankruptcy Act, 1914. 


As Somervell and Romer L.JJ point out in their judgments the trustee takes no better title than the bankrupt had. He is no more entitled than was the debtor before his bankruptcy to revoke the wife's licence on his own authority or to sue her for possession of the property. In his judgment Denning L.J specifically highlighted the view that the trustee in bankruptcy takes subject to the wife's right, for this right is an equity. To seek possession alternatively to proceedings under section 105 (1) of the Bankruptcy Act, 1914, the trustee could proceed by way of originating summons in the husband's name under section 17 of the Married Women's Property Act, 1882.


Denning, LJ makes reference to
Bendall v. McWhirter in Jess B. Woodcock & Sons Ld. v Hobbs [1955] 1 W.L.R. 152, at page 155, when he observes, "Many cases have come before the courts lately where a husband owns the matrimonial home and then deserts his wife, leaving her there with the children. In such a case the husband cannot turn his wife and children out into the street simply because he is the legal owner of the house. He can only recover possession if the court thinks fit to order her to go. If he goes bankrupt and the house becomes vested in his trustee in bankruptcy, the trustee cannot get possession unless the court in its discretion orders her out: Bendall v. McWhirter. So much is well settled."


In Hadkinson v Hadkinson [1952] P. 285, at page 297, Denning, LJ (as he then was) mentions bankruptcy in the following terms: "Since the Judicature Acts the same rule has been applied to the Bankruptcy courts. Thus, when a bankrupt had disobeyed an order to make a statement of his affairs and had deliberately kept out of the way of the court and of his creditors, he was held to be in contempt and the Bankruptcy court refused to hear his counsel on an inquiry as to damages for breach of contract, even though no attachment had been issued against him, and this court upheld the ruling: see In re Langworthy (1887) 3 T.L.R. 826."


Denning, LJ's next substantial contribution to the bankruptcy jurisdiction came in In re A Debtor, No. 991 of 1962 v H. Tossoun [1963] 1 W.L.R. 51. This case concerned an application to set aside a bankruptcy notice and the duty of registrar to receive further evidence. The Court of Appeal had to consider these issues and the Bankruptcy Rules, 1952 (S.I. 1952, No. 2113 (L.14)), rr. 137, 138, 139—Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), s. 1 (1) (g). The facts of the case broadly hinge around a disputed cross-demand between the creditor and debtor. The debtor sought to adduce further evidence, including documents, to substantiate his cross-demand, but the registrar refused to receive further evidence on that matter, holding that he had no power to do so; and he dismissed the application to set aside the bankruptcy notice. The debtor appealed this decision up to the Denning, LJ and his Court of Appeal brethren. They held that the application to set aside the bankruptcy notice ought not to have been dismissed and that it should be referred back to the registrar for rehearing and to admit the further evidence. 


They observed that where an issue as to a cross-demand had been joined, the registrar had ample jurisdiction to receive further evidence generally in order to fulfil his duty to reach a conclusion on the question whether there was a genuine cross-demand. 



In re Davenport No. 332 of 1962 [1963] 1 W.L.R. 817 we again see Denning, LJ in action in the bankruptcy sphere, this time in relation to a director infant, a debt guarantee and the exercise of discretion. Judgment was given against an infant (aged 18) for an unenforceable debt. As a consequence of this a receiving order and order of adjudication in bankruptcy were made against the infant debtor on the application of landlords. She was the director of a limited company. She had guaranteed the rent of the business premises. The rent fell into arrears. The Court of Appeal had to consider the discretion in court to set aside orders and the Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), s. 29 (1).

It was argued that the receiving order ought not to have been made because she was an infant at the date of the judgment and the receiving order, and the guarantee of the rent in the underlease was a debt unenforceable against an infant. These arguments did not succeed at first instance before the Registrar. The bankrupt appealed. The appeal was allowed. The Court of Appeal held that
although an infant could be made bankrupt in respect of debts legally enforceable against an infant, the debt on which the judgment and the petition were founded in this case was a debt unenforceable against an infant, and, there being no other legally enforceable debts against this infant, the court should in the exercise of its discretion under section 29 of the Bankruptcy Act, 1914, annul the order of adjudication in bankruptcy and all the proceedings anterior to it.


Readers will note that Denning, LJ's contributions to date had been on the personal side of the subject. We now get his first corporate contribution in the shape of 
In Re Cyona Distributors Ltd [No. 00465 of 1956] [1967] Ch. 889. The case concerned a company in winding up, fraud by a director and the possible imposition of a trust for creditors generally. The salient provision under consideration was the Companies Act, 1948 (11 & 12 Geo. 6, c. 38), s. 332 . The fraud in the case related to a director of the company who was being prosecuted for conspiracy to defraud the Inland Revenue Commissioners of purchase tax. On March 8, 1961, the day of the trial of the director, bankers' drafts for the bulk of the commissioners' outstanding claim were handed over to the commissioners at the door of the court by the director's solicitor. The liquidators contended that the commissioners held the sum received by them on March 8, 1961, for the liquidator.

At first instance
Plowman J. held that the claim under section 332 was impressed with a trust for the creditors generally and that the commissioners were accountable to the liquidator for the sum paid to them in extinguishment of their claim. The commissioners appealed. The appeal was allowed. Lord Denning MR (as he had by now become) held that the commissioners were not accountable for the sum received by them because a claim by a creditor under section 332 of the Act of 1948 was made on his own account and that such a claim was not made under a trust; and that the payment of the money had nothing to do with the application under the section.


Lord Denning MR's next contribution, again on the corporate side of the subject followed in 
Rolls Razor Ltd. v Cox [1967] 1 Q.B. 552. Readers will not need reminding of this first salvo in the famous case series on, inter alia, set-off. Lord Denning M.R., Danckwerts and Winn L.JJ. sat on the panel in the case. They had to consider the Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), s. 31. Section 31 of the Bankruptcy Act 1914 provided a set-off provision that could not be excluded by agreement. Cox was a door-to-door salesman of washing machines. The company supplied him with a van and stock. In terms of payment, "The company paid him the commission earned in the previous week but retained a percentage in a retention fund against possible default by the salesman, the cash retained being repayable in three instalments after determination of the agreement between the parties."

The company went into voluntary liquidation in July 1964 and "On that date, the company held in the retention fund and in respect of the previous week's sales GBP 246 on behalf of the defendant salesman. The salesman held GBP 106 from sales, goods for sale worth GBP 3 and seven tap-adapters, not for sale but for use when demonstrating the machines." The salesman attempted to assert a lien on the cash and goods in his hands. The liquidator sued the defendant for all the cash and goods in his hands and claimed that no set-off could take place and that he was restricted to proving in the bankruptcy.

At first instance the county court judge ordered Cox to hand over the goods and the money. Cox appealed. It was held by the Court of Appeal that Cox was entitled to the set-off provided by the 1914 Act, for there had been mutual dealings within the section, and its operation could not be excluded by agreement.

The next Lord Denning MR insolvency case of note is Prichard v Westminster Bank Ltd. and Same [1969] 1 W.L.R. 547. The panel in the case consisted of Lord Denning M.R., Edmund Davies and Phillimore LJJ. The case concerned the administration of an insolvent estate and the rules providing for creditors to rank pari passu. The statutory provisions that were discussed were the Administration of Estates, 1925 (15 & 16 Geo. 5, c. 23), and s. 34—Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), s. 33 (5) (7). The debtor died leaving a gross estate of £27,530. However, when a national bank, as executors, began to administer the estate it was found to be insolvent.  A creditor obtained a judgment for a debt of £144. This sum was duly paid. When this was appealed the Court of Appeal held that, "the clear statutory provisions of section 33 (5) and (7) of the Bankruptcy Act, 1914, which became operative by virtue of section 34 of the First Schedule to the Administration of Estates Act, 1925, made it obligatory that all debts proved in the bankruptcy, deemed to be at the date of the death, should be paid pari passu, and there was no room for the exercise of a discretion in favour of a diligent creditor."

Other bankruptcy and insolvency related cases in which the Lord Denning was involved include:
  • Curtis v Maloney [1951] 1 K.B. 736
  • Metliss v National Bank of Greece and Athens S.A. [1955 M. No. 4083.], [1957] 2 Q.B. 33
  • In Re Overseas Aviation Engineering (G.B.) Ltd [1963] Ch. 24
  • In Re Barleycorn Enterprises Ltd [1970] 2 W.L.R. 898 [1970] Ch. 465
  • Halesowen Presswork & Assemblies Ltd. v Westminster Bank Ltd [1970] 3 W.L.R. 625, [1971] 1 Q.B. 1
  • In Re Pergamon Press Ltd [1971] Ch. 388
  • Marley Tile Co. Ltd. v Burrows and Another [1975 M. No. 329], [1978] Q.B. 241
  • In Re James (An Insolvent) (Attorney-General intervening) [1977] 2 W.L.R. 1 [1977] Ch. 41




Picture Credit: http://i.telegraph.co.uk/telegraph/multimedia/archive/01585/lord-denning_1585757c.jpg

Friday, 12 November 2010

The latest BPIRs - [2010] BPIR 1053-1296 Number 5: more interesting cases for our consumption

The learned editors have selected another set of interesting cases for the latest edition of the BPIRs. Here are the details: 

"[2010] BPIR 1053 
Re Abbey Forwarding Ltd (In Liquidation); Hone and Others v Brittain [2010] EWHC 1644 (Ch) 
ChD, Richards J, 14 June 2010 
- WINDING UP - Liquidator's powers - Whether court should intervene to control actions by liquidator in respect of conduct of litigation 
Winding up - Whether liquidator should be removed 

[2010] BPIR 1063 
Doyle (Trustee in Bankruptcy) v James and Another 
Cardiff CC, His Honour Judge Chambers QC, 9 April 2010 
- BANKRUPTCY - Dwelling house - Realisation of interest in dwelling house by a trustee in bankruptcy - Meaning of 'realises' - Sham - Insolvency Act 1986, ss 283A and 423 

[2010] BPIR 1075 
Flett v Her Majesty's Revenue Customs and Daly [2010] EWHC 2662 (Ch) 
ChD, Anthony Elleray QC (sitting as a deputy High Court judge), 10 May 2010 
- BANKRUPTCY - Annulment - Whether bankruptcy order ought not to have been made - Revenue liability - Whether Revenue liability outstanding at date of bankruptcy - Burden on debtor to satisfy court of absence of liability - Effect of Taxes Management Act 1970 - Insolvency Act 1986, s 282(1)(a) 
- BANKRUPTCY - Annulment - Whether bankruptcy order ought not to have been made - Appropriate relief in event of successful application - Insolvency Act 1986, s 282(1)(a) - Insolvency Rules 1986, r 6.30 

[2010] BPIR 1090 
Grosvenor Estates Belgravia v Laidley 
ChD, Mr Registrar Jaques, 22 June 2010 
- BANKRUPTCY PETITION - Dismissal - Costs where debtor pays off undisputed debt element of petition debt leaving a genuinely disputed element outstanding - Payment by debtor made after service of petition but petition not complying with requirements of the Insolvency Rules 1986 
- BANKRUPTCY PETITIONS - Need to comply with requirements of the Insolvency Rules 1986 

[2010] BPIR 1093 
Hagemeister, Re (A Bankrupt) and Others 
Manchester CC, Mr Recorder Neil Cadwallader, 19 May 2010 7 June 2010 
- BANKRUPTCY - Jurisdiction - EC Regulation 1346/2000 on Insolvency Proceedings - Main proceedings and secondary proceedings 
- EC REGULATION 1346/2000 ON INSOLVENCY PROCEEDINGS - Secondary proceedings - Whether debtor had establishment in England at time of petition 
- BANKRUPTCY - Annulment - Whether debtor petition made appropriate disclosure to court 

[2010] BPIR 1111 
Hargreaves, Re (In Individual Voluntary Arrangement); Booth v Mond [2010] EWHC 1576 (Ch) 
ChD, His Honour Judge Hodge QC (sitting as a High Court judge), 17 February 2010 
- BANKRUPTCY - Individual voluntary arrangement - Income payments agreement - Whether arrears under an income payments agreement come within a subsequent IVA - Insolvency Act 1986, s 310A - Insolvency Rules 1986, rr 6.193B and 12.3 

[2010] BPIR 1123 
Her Majesty's Revenue and Customs v (1) Portsmouth City Football Club Ltd (2) Kubic and Kiely (Joint Administrators of Portsmouth City Football Club Ltd [2010] EWHC 2013 (Ch) 
ChD, Mann J, 5 August 2010 
- COMPANY VOLUNTARY ARRANGEMENT - Challenge by HMRC on the grounds of unfair prejudice and/or material irregularity - Whether proposal to creditors made full disclosure of relevant facts - Contentious disqualification of part of HMRC claim by chairman of creditors' meeting - Status of football creditors under a CVA 

[2010] BPIR 1151 
Legal Equitable Securities plc (In Liquidation); Bella v Linton and Another [2010] EWHC 2046 (Ch) 
ChD, Lewison J, 21 May 2010 
- LIQUIDATION - Proof of debt - Rejection of proof - Extension of time for appealing the rejection of proof 

[2010] BPIR 1155 
Mayhew v King and Milbank Trucks Ltd [2010] EWHC 1121 (Ch) 
ChD, Sir Edward Evans-Lombe (sitting as a High Court judge), 20 May 2010 
- ANTI-DEPRIVATION PRINCIPLE - Meaning and effect - Whether assignee from insolvent company entitled to invoke the principle 

[2010] BPIR 1167 
Mond and Another v MBNA Europe Bank Ltd [2010] EWHC 1710 (Ch) 
ChD, Sir William Blackburne sitting as a High Court judge, 9 July 2010 
- INDIVIDUAL VOLUNTARY ARRANGEMENT - Proposal for voluntary arrangement - IVA protocol - Creditor abiding by IVA protocol rejecting proposal - Whether IVA protocol requires a creditor to have a good reason for rejection 

[2010] BPIR 1192 
Moseley v Else Solicitors LLP 
Birmingham CC, District Judge Dowling, 28 July 2010 
- STATUTORY DEMAND - Setting aside - Whether demand was for a liquidated sum 
- SOLICITORS - Invoices addressed to client not paid - Whether unpaid bill, which had not been assessed or made subject to a judgment, constituted a liquidated sum - Client indicating to solicitors that invoice would be paid - Estoppel 

[2010] BPIR 1204 
Practice Guidance: McKenzie Friends (Civil and Family Courts) 
Civ/Fam Cts, Lord Neuberger of Abbotsbury, Master of the Rolls and Sir Nicholas Wall, the President of the Family Division, 12 July 2010 
- PRACTICE GUIDANCE - McKenzie friends 

[2010] BPIR 1210 
Re Ramrattan (In Bankruptcy); Stonham (Trustee in Bankruptcy of Ramrattan) v Ramrattan and Bortolussi [2010] EWHC 1033 (Ch) [2010] EWHC 1059 (Ch) 
ChD, Mann J, 5 May 2010 7 May 2010 
- BANKRUPTCY - Sham transaction by bankrupt in favour of spouse - Relief to be granted upon finding sham - Matters to consider in exercise of discretion 
- BANKRUPTCY - Transaction at undervalue - Transfer of matrimonial home from bankrupt to spouse - Relief to be granted upon finding transaction at an undervalue - Matters to consider in exercise of discretion - Insolvency Act 1986, s 339 
- BANKRUPTCY - Use it or lose it provisions - Effect of use it or lose it provisions on recovery proceedings by trustee in bankruptcy - Enterprise Act 2002, s 261(8) - Insolvency Act 1986, ss 283, 283A, 339 

[2010] BPIR 1234 
Re Sixty UK Ltd (In Administration and Company Voluntary Arrangement); Ryohin Keikaku Europe Ltd v Hollis and O'Reilly (Joint Administrators and Supervisors of Sixty UK Ltd) [2009] EWHC 3866 (Ch) 
ChD, His Honour Judge McCahill QC (sitting as a High Court Judge), 15 October 2009 
- ADMINISTRATION - Tenant company in administration - Whether rent payable as an administration expense by agreement - Whether rent payable as an administration expense under the Lundy Granite principle - Insolvency Act 1986, Sch B1, para 66 - Insolvency Rules 1986, r 2.67 
- COMPANY VOLUNTARY ARRANGEMENT - Company leased retail premises as assignee from original tenant - Original tenant guarantor of company's obligations to landlord - Whether original tenant entitled to claim as a creditor within company voluntary arrangement - Whether lease surrendered - Whether voluntary arrangement releasing liabilities of third parties 

[2010] BPIR 1264 
Re Sixty UK Ltd (In Administration and Company Voluntary Arrangement); Mourant & Co Trustees Ltd and Mourant Property Trustees Ltd v Sixty UK Ltd (In Administration), Hollis and O'Reilly [2010] EWHC 1890 (Ch) 
ChD, Henderson J, 23 July 2010 
- COMPANY VOLUNTARY ARRANGEMENT - Retail premises leased by tenant company - Voluntary arrangement imposing release of parent company's guarantee of tenant company's liability to landlord - Whether voluntary arrangement unfairly prejudicial - Whether material irregularity at or in relation to the creditors' meeting - Insolvency Act 1986, s 6(1) 
- COMPANY VOLUNTARY ARRANGEMENT - Retail premises leased by tenant company - Voluntary arrangement imposing compromise of landlord's claim against the tenant company - Whether adequate compensation - Whether voluntary arrangement unfairly prejudicial - Whether material irregularity at or in relation to the creditors' meeting - Insolvency Act 1986, s 6(1) 
- VOLUNTARY ARRANGEMENT - Duties and obligations of insolvency practitioners."

Picture Credit: Jordans Publishing Limited.

DRO announcement from Ed Davey MP

Following their successful annual Parliamentary reception on Wednesday night R3, the Association of Business Recovery Professionals, have published a response to Mr Ed Davey MP's (pictured) recent announcement on Debt Relief Orders (DROs). Mr Davey has announced plans to reform the DRO regime to allow debtors with rights to approved pensions access to DROs. The change follows a consultation in March 2010 launched in response to concerns that DROs excluded some vulnerable people struggling with small debts. Mr Stephen Law, R3 president has noted:

"We welcome Ed Davey’s announcement yesterday of proposals to reform the Debt Relief Order (DRO) regime, allowing debtors with an approved pension access to the DRO procedure. When DROs were introduced in April 2009 we had concerns that debtors with any kind of pension pot were effectively barred from this form of debt relief.

“The announcement that those with an HMRC approved pension will not have that value set against the asset ceiling of £300 is good common sense. It seemed counter-intuitive to discourage even those with a very small pension pot which could be years away from being drawn down.

“We look forward to hearing more on the detail of these revised criteria but it should allow many more to take up this accessible and low-cost form of statutory debt relief.”

The annual R3 Parliamentary reception was held on Wednesday 10 November 2010 in the Churchill room, Palace of Westminster. The event was very interesting and informative. MPs, IPs, lawyers, and academics mixed in the Churchill room and on the Lords' Terrace discussing various insolvency issues. R3 also launched some new research on future trends in insolvency.

Picture Credit: http://www.kingstonguardian.co.uk/resources/images/1296516/?type=display

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